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Operation-Belcarra-Report-2017.Pdf October 2017 Operation Belcarra A blueprint for integrity and addressing corruption risk in local government October 2017 Operation Belcarra A blueprint for integrity and addressing corruption risk in local government © The State of Queensland (Crime and Corruption Commission) (CCC) 2017 You must keep intact the copyright notice and attribute the State of Queensland, Crime and Corruption Commission as the source of the publication. The Queensland Government supports and encourages the dissemination and exchange of its information. The copyright in this publication is licensed under a Creative Commons Attribution (BY) 4.0 Australia licence. To view this licence visit http://creativecommons.org/licenses/by/4.0/. Under this licence you are free, without having to seek permission from the CCC, to use this publication in accordance with the licence terms. For permissions beyond the scope of this licence contact: [email protected] Disclaimer of Liability While every effort is made to ensure that accurate information is disseminated through this medium, the Crime and Corruption Commission makes no representation about the content and suitability of this information for any purpose. The information provided is only intended to increase awareness and provide general information on the topic. It does not constitute legal advice. The Crime and Corruption Commission does not accept responsibility for any actions undertaken based on the information contained herein. ISBN 978-1-876986-85-8 Crime and Corruption Commission GPO Box 3123, Brisbane QLD 4001 Phone: 07 3360 6060 (toll-free outside Brisbane: 1800 061 611) Level 2, North Tower Green Square Fax: 07 3360 6333 515 St Pauls Terrace Email: [email protected] Fortitude Valley QLD 4006 Note: This publication is accessible through the CCC website <www.ccc.qld.gov.au>. October 2017 The Honourable Peter Wellington MP Speaker of the Legislative Assembly Parliament House George Street BRISBANE QLD 4000 Dear Mr Speaker In accordance with Section 69 of the Crime and Corruption Act 2001, the Crime and Corruption Commission hereby furnishes to you its report, Operation Belcarra – A blueprint for integrity and addressing corruption risk in local government. The Commission has adopted the report. Yours sincerely Alan MacSporran QC Chairperson Contents Foreword viii Abbreviations ix Glossary x Summary and recommendations xi Summary xi Recommendations xii Part 1: Background to Operation Belcarra 1 1 Introduction 2 Background 2 CCC jurisdiction 2 Operation Belcarra 3 About this report 5 2 Queensland local government and the 2016 elections 7 Local government in Queensland 7 Key legislative requirements for local government elections 7 The 2016 elections 11 Part 2: Investigation outcomes 12 3 Investigation summary 13 Action taken by the CCC in relation to allegations identified during Operation Belcarra 13 Allegations identified during Operation Belcarra 13 4 Gold Coast City Council election 16 Focus of the public hearing 16 Allegations about candidates advertising or fundraising as a group without advising the returning officer 16 Allegations about candidates failing to comply with funding and disclosure obligations 18 5 Ipswich City Council election 23 Focus of the public hearing 23 Allegations about candidates advertising or fundraising as a group without advising the returning officer 23 Allegations about candidates failing to comply with funding and disclosure obligations 26 v 6 Moreton Bay Regional Council election 28 Focus of the public hearing 28 Allegations about candidates advertising or fundraising as a group without advising the returning officer 28 Allegations about candidates failing to comply with disclosure obligations 30 7 Logan City Council election 33 Focus of the public hearing 33 Allegations about candidates failing to comply with disclosure obligations 33 Allegations about councillors attempting to unlawfully influence council decisions 38 Part 3: Discussion of key issues 40 8 Principles of good government 41 Four key principles of good government 41 Key issues identified 41 9 Uneven competition between candidates 43 Uneven financial competition 43 Other forms of uneven competition 48 10 Distortion of the concept of independence 50 Claims of independence in the 2016 elections 50 Differing views about what it means to be independent 52 Limited obligations to disclose affiliations and interests 54 11 Ambiguity about the nature of relationships between candidates 57 Group-like practices in the 2016 elections 57 Imprecision in the legislative definition of a group 60 12 Obscuring of relationships between donors and candidates 62 Donations to candidates via third party entities 62 Non-compliance with funding and disclosure obligations 65 Lack of a best practice donation disclosure scheme 72 13 Perceptions of compromised council processes and decision-making 76 Adverse effects of donations on the perceived integrity of council operations 76 Poor management of conflicts of interest 79 14 Limited compliance monitoring and enforcement 87 Legislative limitations 87 Deficiencies in the ECQ’s monitoring and enforcement activities 89 vi OPERATION BELCARRA Appendix 1: Public hearing terms of reference 96 Appendix 2: Witnesses who appeared at the CCC’s public hearing 97 Appendix 3: Procedural fairness and stakeholder submissions 99 Submission from Mr Richard Bingham, former Queensland Integrity Commissioner 101 Submission from Cr Luke Smith, Mayor, Logan City Council 102 Submission from Cr Kylie Stoneman, Division 4, Ipswich City Council 107 Submission from Cr Allan Sutherland, Mayor, Moreton Bay Regional Council 108 Submission from Cr Tom Tate, Mayor, Gold Coast City Council 111 Submission from Ms Penny Toland, unsuccessful mayoral candidate, Gold Coast City Council 114 Submission from Mr Walter van der Merwe, Queensland Electoral Commissioner 117 Appendix 4: Summary of donation disclosure obligations for the 2016 local government elections 119 Appendix 5: 2016 Gold Coast City Council election results 123 Appendix 6: 2016 Ipswich City Council election results 125 Appendix 7: 2016 Moreton Bay Regional Council election results 127 Appendix 8: 2016 Logan City Council election results 129 Appendix 9: Examples of joint how-to-vote cards 131 Appendix 10: Electoral expenditure regulation for local government elections in other Australian jurisdictions 134 References 139 vii Foreword The Crime and Corruption Commission (CCC) commenced Operation Belcarra in response to complaints about the conduct of candidates contesting the 2016 Queensland local government elections. Operation Belcarra centred on allegations that candidates had operated as undeclared groups, lodged electoral funding disclosure returns that contained false information, and failed to operate a dedicated bank account during their disclosure period. Some matters relating to these activities remain under investigation. As Operation Belcarra progressed, it became apparent that many of the issues under investigation had been previously examined by this agency or its predecessor. In 1991, the then Criminal Justice Commission (CJC) examined property developer donations and conflicts of interest on the Gold Coast. In 2006, the then Crime and Misconduct Commission (CMC) examined property developer donations and undeclared groups of candidates, again on the Gold Coast, and in 2015, the CCC examined the practices relating to the receipt, management and disclosure of electoral donations by the former mayor at Ipswich City Council. The recurring nature of these issues, despite increased regulation and oversight of local government, elections and political donations over time, highlights their inherent potential to cause concerns about corruption and adversely affect public perceptions of, and confidence in, the transparency and integrity of local government. Indeed, in the event that media reporting reflects public sentiment, it would appear that the Queensland community is calling for local government to be held to higher standards. Reflecting this, it was important that we not only investigate the allegations, but also identify the deficiencies of the current system and strategies to decrease corruption risks and increase public confidence in local government. We found widespread non-compliance with the legislative framework. In the Commission’s view, this non-compliance is largely caused by a deficient legislative and regulatory framework. The Commission has recommended an extensive package of reform that addresses these deficiencies and will improve equity, transparency, integrity and accountability in council elections and decision- making. Each of the 31 recommendations addresses a deficiency in the current system, but their impact is consolidated and amplified by the implementation of the other recommendations. For this reason, the Commission encourages the government to implement the whole package of reform. Alan MacSporran QC Chairperson viii OPERATION BELCARRA Abbreviations ACCC Australia–China Chamber of CEO Inc. ALP Australian Labor Party CC Act Crime and Corruption Act 2001 CCC Crime and Corruption Commission CFMEU Construction, Forestry, Mining and Energy Union CMC Crime and Misconduct Commission Cr Councillor DILGP Department of Infrastructure, Local Government and Planning ECQ Electoral Commission Queensland EDS Electronic Disclosure System GCCC Gold Coast City Council ICAC Independent Commission Against Corruption (New South Wales) ICC Ipswich City Council LCC Logan City Council LG Act Local Government Act 2009 LGA local
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